Home NEWSBusiness The Untold Story of the Liquidation of Baba Danpullio’s Companies in South Africa (PART 2)

The Untold Story of the Liquidation of Baba Danpullio’s Companies in South Africa (PART 2)

by Atlantic Chronicles
AC
  • Details of Some Of The Defaults Registered From Mid-2018 in the Repayment of Loans Danpullo’s Bestinver Group obtained from FirstRand Bank
  • There was even a Default to Repay an Overdraft of R 5 million taken from FirstRand Bank
  • Four Applications for Liquidation of Danpulo’s Companies Filed in Court by FirstRand Bank Before Outbreak of COVID-19
  • FirstRand Bank Fumed when it was Informed in 2018 that Bestinver Group Owed R 24 million Unpaid Taxes in 2016 and 2017, and Raised the Issue with Baba Danpullo
  • Baba Danpullo in a 20-page Affidavit on Oath at Johannesburg High Court on December 8, 2020, admitted that his Bestinver Group Defaulted Several Times in the Repayment of the Loans

For unknown reasons, Ahmadou Baba Danpullo’s Bestinver Company South Africa Propriety Limited (Bestinver Group), as early as mid-2018 started disrespecting some terms of the loan agreements that were signed with FirstRand Bank in 2016 and 2017.

On May 29, 2018, FirstRand Bank had a meeting with Bestinver Group. Baba Danpullo admitted in his 20-page Affidavit on Oath that he declared and signed on December 8, 2020, at the High Court in Johannesburg that on May 31, 2018, FirstRand Bank addressed a correspondence to Bestinver Group.  He said in Point No. 29. 1 that: “The Second Responded referred to a meeting of 29 May 2018 and summarised issues and concerns by Second Respondent which included governance, and visibility on the business (no audited group’s financial statements as well as accurate management accounts and cash flow analysis and projections). Cash flow visibility was limited”.  The bank noted that even the “temporary overdraft” of R 5 million that the Bestinver Group took, had not yet been repaid.

 

Many Correspondences To Bestinver Group, Received No Replies

Meanwhile, it is clearly stated in Point 29.2 of Baba Danpullo’s Affidavit that: “The Second Respondent  (on September 3, 2018) addressed 2  letters to the First Respondent, putting it on terms and requesting the Group to remedy their defaults by 30 November 2018”.  FirstRand Bank had not received a reply to any of the two correspondences addressed to Bestinver Group, on October 29, 2018, addressed two separate correspondence to the two affiliates, BestinverProp and Joburg Skyscraper that were mortgaged for the 2016 loan that the mother company, Bestinver Group,  signed on August 19, 2016. The correspondences warned the two companies “had failed to rectify their defaults to the Second Respondent”.  This information is contained in Point No. 29.3 of the Affidavit.

Point No. 29. 5: “On 14 December 2018, a further letter was addressed to the First Respondent (Bestinver Group). The letter referred to the breach letter dated  3 September 2018 and the extension letter referred to, dated 29 October 2018, in terms which the second  Respondent outlined  that the various defaults required remedy thereof by 30 November 2018”.

 

Unpaid Taxes For 2016 and 2017

Meanwhile, on November 28, 2018, FirstRand Bank was embarrassed to be informed that Bestinver Group had a tax liability of “R24 million for the tax year end of 2016 and 2017 which had not been paid”.  FirstRand Bank fumed that the failure by Bestinver Group to pay taxes was another breach of the loan agreement and an event of default. The unpaid taxes seemed to have been taxes that Bestinver Group was supposed to pay to the municipalities

One of the terms of the loan agreement that the Board Chairman of the Bestinver Group, Ahmadou Baba Danpullo, signed on behalf of the Group with FirstRand Bank on August 19, 2016, was that the Group would pay all taxes.  Point No. 15. 4 of the Affidavit reads: “I would pay all taxes, rentals, rates, etc in respect of properties which I become obliged to pay, and furnish the Second Respondent with written proof that it has paid”.

FirstRand Bank raised the issue of “tax liability of R 24 million”, or better still the unpaid taxes for 2016 and 2017 by Bestinver Group, when a senior official of the bank, Garvin Bremer, had a meeting with Baba Danpullo.

 

FirstRand Bank Goes Tough

In 2019 the Bestinver Group continued to increase the number of defaults in the monthly repayment of the debts owed FirstRand Bank. For example, Point No.30 in Baba Danpullo’s Affidavit stated that: “The First Respondent (Bestinver Company), including, Joburg Skyscraper failed to remedy their breaches by the afforded date of 28 February 2019”. Point No. 31 added that: “On 9 April 2019, a further letter was addressed to me (Ahmadou Baba Danpullo) confirming that the events of default have not been remedied. The Second Responded afforded the Group further time to remedy the defaults, until 18 April 2019”.

Following another failure by Bestinver  Group to remedy the defaults, FirstRand Bank in a correspondence addressed to the group on April 24, 2019, took a tough position against Bestinver Group on the loan repayment matter, as seen in Point No. 32 of the Affidavit. “By failure of the First Respondent to remedy the breaches, a letter was addressed to the First Respondent on 24 April 2019. The Second Respondent accelerated repayment of all amounts outstanding under the loan agreements. Notice was given that the outstanding balance thereunder also became due and payable. The Group and Joburg Skyscraper were required to pay the full amount outstanding by no later than 31 July 2019”.

 

Both Sides Bring Their Lawyers To The Scene

Not surprisingly the deadline of July 31, 2019, was not respected by the Bestinver Group. Rather the two parties brought to the scene their lawyers (Attorneys).  This was definitely not a good sign, as it was an indication that direct contact between the two sides had come to an end and that the matter could be heading to the courts. Lester Timothy of Timothy and Attorneys was the legal adviser for First Respondent (Bestinver Group), while Frederick Johannes van Tonder of Werkmans Incorporated was the legal adviser for the Second Respondent (FIRSTRAND Bank).  It was these lawyers that started writing to each other on behalf of their clients.

The business relationship between FirstRand Bank Limited and Bestinver Company South Africa Propriety Limited had thus degenerated.  At one point FirstRand Bank threatened to freeze the bank accounts of the Group. The Attorneys of Bestinver Group rapidly addressed a correspondence to the Attorneys of FirstRand  Bank, pleading that freezing the accounts would “be fatal’ to their client’s businesses as they would  “not be able to pay the day-to-day expenses”.

Last Warning

On October 3, 2019, the Attorneys of FirstRand Bank signalled the Attorneys of Bestinver Group that they were about to take the loan defaults palaver to court. He addressed a notice in terms of Section 345 of the Company Act to the attorney of Bestinver Group. But there was no response. The matter finally went to court, as on October 7, 2019, the Sheriff of the High Court Of South Africa, Gauteng Local Division, Johannesburg, “served the Section 345 notice on the business address of Joburg Skyscraper “.

 

Application For Bank Loan!

Bestinver Group seemingly realised then that the issue was no longer a joking matter, as the very next day (October 8, 2019), the Attorneys of the Group addressed a correspondence to the Attorneys of FirstRand Bank, pleading that the Group had applied to Standard Bank for a loan to clear the arrears, that is the outstanding amounts under the loan agreements.  The Attorneys of Bestinver Group said that Standard Bank would decide on the loan application by October 11.

On that October 11, the Attorneys of FirstRand Bank wrote to the Attorneys of Bestinver Group, asking for an update on the loan application. The Attorneys of Bestinver Group responded that the management of Standard Bank would take the application to the bank’s Credit Committee, and the applicant (Bestinver Group) would only know the decision taken concerning the loan application between October 14 –18, 2019. But on October 18, the Attorneys of Bestinver Group wrote to the Attorneys of FirstRand Bank and instead requested two weeks indulgence.   However, FirstRand Bank accepted to grant the two weeks and wait.

But then the two weeks elapsed with no positive news.  On November 23, 2019, the Attorneys of the FirstRand Bank addressed a correspondence to the Attorneys of Bestinver Group, stating that the bank has had to “bend backwards to accommodate Bestinver Group” by giving them enough time to negotiate the loan they said they had applied to obtain from Standard bank.  FirstRand Bank said they had run out of patience.

 

Four Applications For Liquidations

Then in December 2019, FirstRand Bank launched four applications for liquidations against Baba Danpullo’s  Bestinver Company South Africa  Propriety Limited (mother company) , and the three affiliates -Joburg Skyscraper (Pty) Limited, BestinverProp 01 (Pty) Limited, and Leopont 193 (Pty) Limited. The four liquidation applications were lodged under the following four cases: Case No. 22339/19, Case No.22340/19, Case No. 22341/19, and Case No. 22342/19.

By Joe Dinga Pefok (Uncle Joe)

Facebook: The Mentor

Email: djpefok@yahoo.com

Contacts – Telephone / WhatsApp:  (237) 677 17 54 51 / 699 71 83 92

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